The Limits of Corporate Social Responsibility
in Indiaby Professor Prabhu Guptara

The vastness, complexity and contradictions of India
require some minimum historical background if one is to have any hope
of clarity regarding this subject.

In India, responsibility was traditionally limited to "insiders"
- you looked after members of your own immediate and perhaps your extended
family, you might even extend some minimum care to members of your clan,
or at most to members of your caste. Other "outsiders" had no
relationship to you, so their welfare was not your responsibility. If
the system failed some people, that was simply a matter of fate and you
certainly did not interfere in that1.
Of course, our mythology has saintly or noble figures who cared for "complete
outsiders", but their behaviour remained a remote ideal rather than
everyday reality.

In a society bound by notions of caste and fate, the idea of responsibility
for the whole of society constituted a cultural revolution caused by foreign
influences. This started in the first century AD with St. Thomas2
(the disciple of the Lord Jesus who came three separate times to India
and was eventually killed in what is now Chennai), through the impact
of Islam from the seventh century onwards, as well as of outstanding later
missionaries such as William Carey3
in the eighteenth century, James Long4
in the nineteenth century, and C F Andrews5
in the twentieth century.

Influenced by such foreign ideas, Indian reformers, such as Guru Nanak6,
Swaminarayana7, Rammohan
Roy, and Mahatma Gandhi8
in turn then launched reform movements which slowly began to change our
values. We began to accept strange ideas such as the equality of all humans,
the value of work, the imperative to read and to think for oneself and
stand up for what one concludes is right, yet in a manner that respects
the right of others to reach different and even opposing conclusions,
while reserving the right to debate and persuade9.

The work of reformers, whether Indian or foreign, was enormously facilitated
by British rule which, though initially little more than organised robbery,
changed under the influence of the British Evangelicals. From at least
the early nineteenth century10
, legal changes were introduced, though these would never have taken root
without clever orchestration of peer pressure and the example of real
service by government servants and especially their womenfolk11.

During the Independence struggle, Indian companies, which began to proliferate
and prosper from the mid-nineteenth century, threw in their lot with Mahatma
Gandhi, and the resulting concern for the nation caused many of them to
be involved in providing education, health services, and even clean water.
Naturally, the patchwork efforts of individual companies, however intensive,
can never match what governments can and should do. Ultimately, the question
is: does CSR blaze a trail, or is it an alibi for a government's declining
to do what it ought?

After Independence, though civil and political service began swiftly to
be replaced by corruption12,
Fabian-inspired social engineering created the system of reserved seats
for the lower "castes" enabling them to move up the financial
and social hierarchy in some steady fashion. However, the social capital
that enabled this particular form of reverse discrimination to be tolerated
now appears to be dissipating13.
On the other hand, overall economic growth has also created social space
for the lower castes.

These tensions and contradictory pulls
are paralleled in the rest of the world. Continental Europe sees declining
pensions, health care, and investment in public service infrastructure,
while OECD countries have an increasingly lively debate and progressively
more telling action in the area of social responsibility (for example,
in requiring ethical, environmental and social transparency from Pension
Funds14).

Whether the shareholder-activists win
or the stakeholder-activists, it is clear to everyone that SR means higher
wages and higher taxes - better quality of life but at a higher cost.
That does not mean that all differential advantage will disappear, since
countries have different natural endowments as well as different cultures
and values. Denmark may be as "developed" and socially responsible
as Sweden, and the East Coast of the US may be as developed and socially
responsible as the West Coast, but that does not make them the same. Harmonisation
does not equal sameness.

Nor will increasing worldwide social
responsibility necessarily dampen trade and investment flows - most trade
and investment even today is within the developed world, not from the
developed to the "developing" world. Moreover, the key determinant
of trade and investment is risk. It is easy to forget nowadays that India
and China were, through history, some of the richest countries in the
world. Even as late as the eighteenth century, each of these countries
commanded nearly one-third of global GDP. Since then development accelerated
in the West while India and China actually regressed. In the case of India,
at least part of the decline was due to British imperialism, but at least
a part of the progress that India made was also due to the same imperialism.
And India has declined in the world league much more in the 50 years or
so of Independence than it did in three hundred years of British rule.
I would be very interested to see some estimates of the amount of wealth
consumed and withdrawn from the country by the British in the three centuries
of their rule versus the amount of wealth consumed and withdrawn by the
Indian ruling class in the last 50 years.

Today, President Bush likes neither the Kyoto Agreement
nor the International Criminal Court. The governments of most developing
countries would rather base their comparative advantage on simple things
such as cheap labour. Most companies (whether Indian or foreign) would
find it easier to live in the simpler world of shareholder value than
in the more complicated world of corporate social responsibility. Most
individuals too would find it easier to care only for themselves and let
the world go hang. Nevertheless, it is clear that there is and has been
an increasing trend through the last century and indeed the last millennium
towards global standards and global social responsibility. The communications
revolution and global markets make increasingly clear to everyone that
we are all together on this little planet for good as well as for ill.
A single incident at Bhopal makes everyone sit up and take notice. The
collapse of an insignificant currency such as the Baht has consequences
around the globe. The collapse of an Enron or an Anderson changes rules
and attitudes not just in the USA but right round the world. So while
late capitalism presses us all to take less and less time even for ourselves,
it also forces us to ensure that each country makes minimum investments
in infrastructure, education and health. September 11, 2001 has made it
clear to everyone that the global community has a vested interested in
good governance. While a certain degree of poor governance on the part
of certain countries can be tolerated, there comes a point where the consequences
of poor governance make it impossible for us not to intervene, whether
in Afghanistan, the Balkans or the Middle East.

Companies, institutions and countries all become socially responsible
when that coincidences with self-interest. There is much of Africa and
the rest of the world that is still outside the ambit of CSR, but the
AIDS crisis and other health-related matters will gradually ensure that
the move towards global good governance does not halt with a few countries.
This has already threatened patent law and the consequences have not yet
been digested. A re-examination of company law, international trade laws
and the global financial system is not far off. We will have a two-speed
Europe and we do have a multi-speed world. But we cannot and will not
have countries going too slow or too fast, or in the wrong direction for
too long.

It is in that context that we need to see CSR, whether in India or elsewhere.
History does tell us that progress can never be taken for granted. Regress
is possible and has indeed taken place. Nevertheless, the struggle for
global markets is reshaping traditional cultures. The new global culture
which is emerging15
promotes common definitions, rules, structures and standards. Those who
think that markets are by nature perfect as well as those who want to
reform markets, are willy-nilly involved in working towards individual
and corporate social responsibility whose only limit is the globe.
Prabhu GuptaraProfessor Prabhu Guptara is Director,
Organisation Development, Wolfsberg Executive Development Centre (a subsidiary
of UBS A.G.), Switzerland; non-executive Chairman of ADVANCE: Management
Training Ltd., U.K; supervises PhD research at Fribourg (Switzerland)
and continues as Visiting Professor at universities and business schools
round the world. He writes here in a personal capacity. NOTES:

1. My Professor of Sanskrit publicly berated me and other members of our
College Social Service League, as late as 1966, for interfering with the
caste system when we set out to help people in Delhi's slums. For the
relationship between beliefs and social realities, see Vishal Mangalwadi,
Truth and Social Reform, Nivedit Good Books, India, 1989 (various British
and American editions also exist).

2. St Thomas's first came to north India overland (there
were well-established trade routes in what are now Afghanistan and Pakistan).
His second journey was by sea to the area around Bombay. His third journey,
also by sea, was to South India, which historically had sea links both
to the west as far as Africa and Europe and to the east as far as China.
There is no record of how long he stayed each time. But there were Christians
in north India as a result of his preaching till the eighteenth century.
And in South India, the "St Thomas Christians" exist to this
day. Not large in numbers, Christians have had a culture-changing influence
in India, particularly through their schools and hospitals.

3. Vishal and Ruth Mangalwadi, William Carey and the Regeneration
of India: A Model for the Transformation of a Culture, Nivedit Good Books,
Mussoorie, India, India, 1993.

13. Vishal Mangalwadi, The Quest for Freedom and Dignity:
Caste, Conversion and Cultural Revolution, to be published in 2002.

14. From Summer 2000, the British government introduced
historically unprecedented legislation, requiring Trustees of Pension
Funds to declare in their Statement of Investment Principles, whether
and if so to what extent, they take into account social, ethical and environmental
criteria. Other countries such as Switzerland, Germany and Australia quickly
followed suit, and it is rumoured that the EU is considering standardising
that throughout Europe.

15. John Boli and George M Thomas (eds.), Constructing World
Culture, Stanford University Press, USA, 1999.